The tax agency posted marked growth in the use of online and app services during FY24, but the handling of written correspondence and telephony continued to fall well below targets
While it continues efforts to drive more and more users to interact using digital channels, HM Revenue and Customs has acknowledged that shortcomings in customer service levels “caused real difficulties” for citizens during the 2023/24 year.
In its newly published annual report and accounts, the tax agency said that “overall service levels on telephony and correspondence remained below our service standards” throughout the year.
Just over one in three helpline callers that wished to speak to an HMRC adviser were unable to do so in FY24. The successful handling rate of 66.4% was almost five points down from the 71.1% recorded in the prior year – and well below the departmental target of 85%.
There was also a decline in the proportion of customer correspondence dealt cleared within a timeframe of 15 days, which fell from 76.3% to 72.7%. Again, this significantly lagged the target level of 80%.
The report said: “Our overall service levels on telephony and correspondence remained below our service standards in 2023 to 2024, and we recognise that this caused real difficulties for some customers and agents.”
The annual round-up reiterated HMRC’s intent to improve customer-service levels by encouraging ever-greater numbers of users to engage via digital channels – including online GOV.UK services and the department’s own dedicated app.
There was tangible progress on this front during FY24, when 388 million user interactions, equating to 69% of the overall total, were conducted digitally – compared with 63% in the prior year.
The HMRC app, meanwhile, doubled its user base during the year to 3.8 million people, while the total number of logins it clocked up rose by almost two thirds to 88.5 million. The department’s digital assistant recorded even greater growth, as interactions rose from 1.9 million to 5.1 million.
This increase in digital usage did translate to a 5.4 million reduction in user contacts via analogue channels – a classification which covers written correspondence and callers wishing to speak to a human adviser. The cumulative total of these engagements dropped from 50.6 million to 45.2 million.
But HMRC believes “that around 66% of total telephony contact is still for tasks that can be carried out online”.
“To deliver the service standards our customers expect, our aim is to reduce the volume of contact through phone and correspondence over time and boost the number of customers self-serving online, without needing to contact us,” the report added.
The drop in service levels for those that did wish to contact HMRC in FY24 was “affected by growth in the number of customers in the tax system and an increase in the number of customers with complex tax affairs”, according to the report.
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This was compounded by “budgetary pressures” caused by an increase in the amount of annual cost savings the department is expected to deliver over the course of the current spending-review period, which runs until March 2025. When the spending review was conducted in 2021, HMRC was set an objective of delivering £500m in yearly savings – but this target has since been raised to £719m.
“We are on track to exceed the original £500m savings ask, but the £719m is proving more challenging,” the department said.
While continued growth in the use of online, rather than analogue services will help reduce spending, the report said that “this is not just about saving money: it means more customers solve their queries quickly and easily, and our advisers can focus on those who need their help”.
Attempts were made during the year to support this refocusing, with HMRC’s self-assessment helpline being closed for three months during the typically quieter summer period of 2023.
The temporary suspension, which took place on a trial basis, “allowed us to redeploy advisers to high priority work, such as processing an additional 373,000 overpayment work items… [and] this approach [also] led to further increases in the use of our online services”, the report said.
Such success informed plans, announced in the final days to the 2024 fiscal year, to close the helpline for six months of every year going forward, as well as to significantly scale back VAT and PAYE telephone support services.
However, within 24 hours – and following a public outcry – these plans were cancelled, with chief executive Jim Harra acknowledging that “the pace of change needs to match public appetite”.
This sentiment was echoed in the report: “We have grown and improved our online services, and the HMRC app, while ensuring that our digital-first strategy moves at a speed and in ways that our customers are comfortable with.”
After deciding to keep its phone lines open as usual for the time being, HMRC announced in May that it would be provided with an extra £51m in funding improve customer-service performance and hit the targets that have been missed in recent months and years.
